There is no one way of being a start-up CEO. There is no single template or standard job description. Rather, think of the role as a jigsaw with each piece representing a particular area of competence. When correctly assembled, the pieces come together to present a complete picture.
Yet no individual, however brilliant, has the ability or the desire to cover all the pieces. Each apprentice CEO – and that is surely what most first time CEOs are – will by inclination or design select those pieces that best reflect their abilities.
To be sure, there are some ‘corner pieces’ that must carry their imprint. The oft-quoted Fred Wilson puts it well when he says that, ‘A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank‘.
But no two CEOs execute the job in the same way. All CEOs have their own character, their own respective passions, idiosyncrasies, and limitations. And it is awareness of these qualities, gained through self-reflection or feedback from trusted parties, that stands at the core of becoming an effective CEO and building a team of managers that can augment and compensate their leader’s strength and weakness.
But there is a constant quality that stands at the heart of effective start-up CEO competence. A start-up is by definition a company capable of hyper growth. Fast growth companies are characterised by the speed at which things change: by the need to make redundant structures, processes, systems and people that have may have only recently proven successful . The challenge is to manage change as a constant rather than a periodic exercise in realigning a company to changes in its environment. It is why leadership, which is about creating movement, is a more important quality in a start-up CEO than management, which is about nailing things down and optimising operations.
So being a start-up CEO is about negotiating successive transitions. Most founding CEOs excel at the product development stage when the company comprises a committed band of product developers. Fewer and fewer excel as the company grows. This is not purely a matter of ability. I have worked with several CEOs who I believed harboured the ability to evolve their competence to match the changing nature of their role but they simply didn’t want to.
Desire is ultimately what drives learning. And desire has a lot to do with enjoyment. When desire and enjoyment fade and the gap grows between the demands of the role and their skillset, then the job becomes more stressful and the CEO more ineffectual. In my experience, it is a situation that is implicitly understood by employees. It affects morale and engagement as employees know (always earlier than the board) when a CEO is no longer the right person to lead them.
The right thing for the CEO to do in these circumstances is to stand down and slot into a role that restores the alignment between their motivation and preferences. Too often they will persevere and run the inherent risk of the company losing momentum. Or perhaps, they realise that they have taken the company as far as they can and will look to cash in on their investment. The company is sold and the adventure is at an end.